The exterior of a Red Lobster restaurant in Austin, Texas, on May 20, 2024.
Brandon Bell | Getty Images
bankruptcy court Red Lobster’s plan approved Exiting Chapter 11 brings the seafood chain one step closer to emerging from bankruptcy.
The company, known for its seafood products and cheddar biscuits, filed for bankruptcy protection in May. Red Lobster has been grappling with increasing competition, expensive rent, last year’s disastrous shrimp promotion and a broader pullback in consumer spending.
A group of investors under RL Investor Holdings will acquire Red Lobster at the end of this month as part of a restructuring plan. Following the acquisition, former PF Chang CEO Damola Adamolekun will take over to lead Red Lobster. Current CEO Jonathan Tibus, who led the company through bankruptcy, will leave Red Lobster.
“This is a great day for Red Lobster,” Adamokun said in a statement. “With new backers, we have a comprehensive and long-term investment plan that includes a commitment of more than $60 million. The new funding will help revitalize this iconic brand while maintaining the essence of its history.”
RL Investor Holdings includes TCW Private Credit, Blue Torch and funds managed by affiliates of Fortress Investment Group. Red Lobster will operate as an independent company.
After streamlining its restaurant portfolio, the chain now operates 544 restaurants in the United States and Canada.
At least nine other restaurant chains have filed for bankruptcy protection this year. High interest rates and a pullback in consumer spending are putting pressure on restaurants, especially if they are already struggling to recover from the Covid-19 pandemic.
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